Pacific Insight Electronics Corp. agrees to credit facilities of $22 million

Trading Symbol: PIH

NELSON, BC, Sept. 2, 2014 /CNW/ - Pacific Insight Electronics Corp. (the "Company") (TSX: PIH) announced today that it has obtained credit facilities from two North American banks, for a total of $22,000,000. The proceeds will be used to finance working capital, new equipment purchases, anticipated future growth, and to repay certain existing debt.

The credit facilities are summarized as follows: (i) a new facility from the Bank of Montreal (the "BMO Facility") with an aggregate borrowing base of $14,000,000; and (ii) a facility from Roynat Inc. (the "Roynat Facility" and together with the BMO Facility, the "Facilities") for the principal amount of $8,000,000.

The BMO Facility, which will replace an existing facility the Company has in place with BMO, is comprised of a $12,000,000 committed revolving asset based lending facility (the "BMO Revolver") and a $2,000,000 term loan (the "BMO Term Loan"). The BMO Revolver is available at the Company's option. The availability under the facility is determined based upon eligible accounts receivable and inventory balances. The revolving facility matures three years from the date of closing. The BMO Term Loan is available in a single drawdown at the Company's option, and must be repaid in full by the earlier of 30 months from drawdown and the maturity date of the BMO Revolver. The Company drew upon the $2,000,000 BMO Term Loan at closing.

The Roynat Facility is a revolving term loan and advances thereunder can be made until July 31, 2015 unless otherwise extended by the Company and Roynat.  Advances on the Roynat Facility are based on an eight year (96 month) amortization schedule. The purpose of the Roynat Facility is to finance equipment. The Company drew approximately $5,800,000 on the Roynat Facility at closing.

The Facilities bear interest at favourable rates which are customary for facilities of this nature.

Pacific Insight Electronics Corp. designs, manufactures and delivers electronic products and full service solutions to the heavy truck, automotive and specialty markets. The Company designs and distributes its products and services to original equipment manufacturers and distributors North America.

Cautionary Note Regarding Forward-Looking Statements

This press release contains "forward-looking statements" and "forward-looking information" within the meaning of applicable Canadian securities legislation. Forward-looking information includes, but is not limited to, information with respect to the use of proceeds of the Facilities. Generally, forward-looking information can be identified by the use of forward-looking terminology such as "plans", "expects", "estimates", "intends", "anticipates" or "believes" or variations of such words and phrases or state that certain actions, events or results "may", "could", "would", "might", or "will be taken", "occur", or "be achieved". Forward-looking information is based on the reasonable assumptions, estimates, analysis and opinions of management made at the date that such statements are made. Forward-looking information is subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of the Company to be materially different from those expressed or implied by such forward-looking information, including a need to reallocate the use of proceeds of the Facilities due to changes in the Company's business needs. Accordingly, readers should not place undue reliance on forward-looking information.  The Company does not undertake to update any forward-looking information, except in accordance with applicable securities laws.

SOURCE: Pacific Insight Electronics Corp.

Email enquiries may be sent directly to [email protected] or via telephone: [phone]. The Company's website is www.pacificinsight.com.